University of Chicago Professor Todd Henderson has found himself in the curious position of being the focus of a national debate over tax rates — and his family’s finances. The corporate law professor wanted to show that people making more than $250,000 a year are not super rich and indeed can be struggling in this economy like other families. The response to this argument on his blog was fast and furious — leading Henderson to shutdown his blog and decline further commentary.
Henderson is a neighbor of President Obama in Chicago and decided to open up his own finances to show that people in the top tax bracket are not super-rich citizens with large surpluses of money. He wrote “[a] quick look at our family budget, which I will gladly share with the White House, will show him that, like many Americans, we are just getting by despite seeming to be rich.”
He detailed how he and his wife, a doctor, paid $100,000 in federal and state taxes last year and $15,000 in property taxes. He explained that they carry $250,000 in student loans and that they do not have a large amount of excess cash.
You can certainly disagree with his view but the response was vicious and unfortunately all too common for blogs. People deluged the blog and his email with hateful comments. This increased when a business site reportedly estimated the combined income of the Henderson’s at over $400,000.
Henderson complained about an “online lynch mob” that sent messages like “die yuppie scum” and other threats. He said “[t]he consequences are devastating for me personally” and shutdown his blog.
I have long complained about the uncivil nature of discourse on blogs. Anonymity seems to unleash mean and petty impulses among some people. One can certainly disagree with Henderson’s view that $250,000 is not the real line of demarcation for the super rich. Many have made this argument and he was not denying that he is well off, but rather that he is not so wealthy as to be set apart with people who are making huge sums of money each year. That brought other academics to the forefront in sharp but civil disagreement. Prof. Bradford DeLong of the University of California at Berkeley insisted that “[b]y any standard they are rich. But they don’t feel rich.”
The problem are those people who want to immediately take the debate into name-calling and threats. I happen to think that the disclosure of his own financial details was offering a new context for this debate whether families making $250,000 or more are worthy of consideration in the tax cut debate. This debate has been maintained on generalities and it is a good idea to look at actual families above this tax line. Perhaps the Hendersons were not the best example, but it was the only example that Henderson could give on his blog.
I hope that Henderson will reconsider and restart his blog — and that people will show a level of civil restraint in participating in this and other debates.
Sources: Fox
Jonathan Turley
I don’t know if he addressed this in his blog but the difference in tax would be on income -over- 250k. It’s the same for everyone under $250k (under the limited extension). And it’s just a few additional points for income over $250k.
At the same time that income is far above the FICA tax cutoff. That’s a not-inconsequential point since most people pay more to FICA than state and federal income tax. I think the cutoff is around 70-80 adjusted gross income (that is, after mortgage deduction.) Most people don’t notice it since they only see their contribution, not both theirs and their employers. You should count both since an employer would (in theory) offer the difference in salary and/or benefits if it didn’t have to go to FICA.
One thing he does deserve is to be treated in a civil and decent manner.
It is good practice because if we do not get a handle on civil discourse at a personal level, eventually it works its way into government, and then we have nations at odds with one another in a dangerous manner.
Civil discourse and respect are good for civilization.
http://blogdredd.blogspot.com/2010/09/embryonic-look-at-civilizations-future.html
Chris:
good point on the social security. Most people in that tax bracket probably end up paying between 15%-25% depending on their deductions for federal tax alone not including state taxes, property taxes [including realestate], local taxes and sales taxes. I added it all up one time and my wife and I were paying about $60,000 in all those taxes and we earn nowhere near $250k. I was floored it was over 35% of our income.
I could have hired an employee for that amount of money or bought a new car or appliances for the house or a vacation home or saved it, and people wonder why unemployment is high.
Taxes do not create jobs, production does. And robbing Peter to pay Paul (stimulus) does not create jobs.
I read the clowns original post – he did not deserve “die yuppie scum” but it was obvious to me that he was asking for it. His whine was based in large part on his expenses, which included many things people not making 250k+ can even dream a bout let alone whine about the cost of. His insensitive and ignorant rant got an awful reaction that a ration person would have foreseen.
Chris – you hit one of the nails on the head. Back in the reign of St. Ronnie there was a large increase in FICA to help offset the excessive cuts on income tax. This falls most heavily on lower incomes & this clown avoids it on most of his income. I’d be willing to make a trade off: keep the current income tax structure in place but remove the limits from FICA, tax every dime.
Hmm…25% flat tax….I like the ideal…no deductions….
The Boston Globe explored the behavior of anonymous online posters earlier this summer.
The quote above was closed improperly and blends a citation from The Boston Globe with my own thoughts.
The portion of the quote following the first paragraph is mine, and not the Globe’s:
Newspapers and bloggers should be able to choose their own standards and threshold for discussion.
That said, anonymity broadens the contributor pool, invites individuals with inside information to participate where they might not with a real name, encourages directness, and allows outstanding ideas to shine regardless of the name of the poster.
The real name “James Smith” provides substantial anonymity. The same policy applied to a unique named will identify the individual down to the person. Therefore real name policies ask different things of different people, may not civilize the discourse, and discourage participation.
Henderson is not coming back to this discussion of his family finances any time soon, if ever, according to this post.
“The posts that generated an unintended blogocane have been deleted. I stand by the posts, the facts in them, and the points they were making. The reason I took the very unusual step of deleting them is because my wife, who did not approve of my original post and disagrees vehemently with my opinion, did not consent to the publication of personal details about our family. In retrospect, it was a highly effective but incredibly stupid thing to do. The electronic lynch mob that has attacked and harassed me — you should see the emails sent to me personally! — has made my family feel threatened and insecure. We recently had a very early preemie, and this was a quite inopportune time to bring this on my family. For the record, I still think the planned tax increases will negatively impact my family and my country, but that is basically all I should have said. To my wife, my three children, and to anyone who was offended by my remarks, please accept my apologies. To those with pitchforks trying to attack me instead of my message, I feel sorry for you. You have caused untold damage to me personally. I may be wrong, even stupid, but I don’t think I deserved that.”
http://truthonthemarket.com/2010/09/20/im-sorry/
The professor is very smart and educated, but on this occasion was very foolish. He could have posted a hypothetical budget of a fictitious family instead.
There are some good rules for the internet that all should observe.
One, do not compare someone to Hitler, because you lose the argument.
Two, for controversial statements, compose them offline and sleep on it overnight before posting.
And three, for anyone who is married, who used to be married, or is even thinking of ever getting married to a spouse, DO NOT EVER EVEN THINK OF POSTING YOUR FAMILY INCOME ON THE WEB WITHOUT CHECKING WITH SAID SPOUSE FIRST, YOU MORON!(facetious statement made with humorous intent with no malice whatsoever).
I am reminded of the old psych-econ fable. Able finds $20 on the sidewalk, and is overjoyed.
Baker finds $100, but Charlie sees it at the same time and claims half.
Baker is despondent because he has “lost” $50, even though he is $30 richer than happy Able.
There was a really good post by one blogger. If you are not the lead dog, the view is always the same.
As Einstein said, its all relative.
Ps, since the prof did not reveal his “budget” or a “net worth’ statement, but simply related some selective excerpts from the family finances, it is difficult to judge his situation, so I will not. But an awful lot of posters noted that a tax increase on income ABOVE $250,000 cannot possibly affect a family with income of ONLY $250,000.
There are so many that think it is their right to overpower others. It all started with the shouting at the cameras a sporting events. That seemed to be the time when a younger generation wanted to communicate: “In your face!”. I must admit, I don’t understand it. I thought it was a fad and would have been gone by now.
So long as the dollar remains the pornographic centerpiece of American thought, Mr. Henderson can expect to feel the heat. The choice to live in a house requiring $100,000 per year in taxes, as well as the choice to carry $250,000 student loans make these people poor victims. I do not have any sympathy for them. It was an arrogant, condescending hammer-blow disguised as “opening our finances to show we’re not rich.”
No one is entitled to own anything. Nor does ownership elevate you as a human being.
That they have received torrential blowback during a deep recession was completely predictable. Blaming anonymous posters for the Hendersons’ dumb decisions is pointless. Might as well blame the wind because it howls.
I have no problem with anonymous anything. I post my real name and e-mail address here, and who gives a fig? That’d be nobody. Besides, I could be lying and there’s no way to prove it objectively through just me. Like everything else we encounter online, if its not backed up my independent sources, it’s probably piffle.
This post included.
Perhaps the overreaction to Henderson’s post was decidedly uncivil and wrong. However, there are many many millions of people in this country whose income never approached even $100K, that would not be able to sympathize with this man’s problems. In my own case I never in my working career made it into 6 figures. My kids, both smart, had to go to Public Universities, since I couldn’t afford private ones. Nevertheless, there was considerable debt in student loans for each which I am voluntarily paying off. I have no doubt that my kids are every bit as deserving as his kids to the benefit of a prestigious education. It is his income that makes the difference and his lack of realization of this brands him as selfishly ignorant.
Chis’ point though is the most salient. The biggest tax discrepancy in the US is the FICA taxes, which are co-mingled with all government income and whose cutoff falls heavily on the less affluent classes. It was indeed a legacy of the Reagan years and continues to represent a duping of the public that the media gives short shrift to.
Finally, Mr. Henderson has no realization of what a fortunate man he is compared with the majority of Americans. That lack of realization exposes him for the limited thinker he is.
This should be a lesson to Mr. Turley and all bloggers, don’t whine about your hardships when you have chosen to live at that level.
There is too much discrepancy in incomes today to think others are going to care that you may be as broke as anyone because your expenses are putting you there.
The primary arguement for keeping the Bush top tax rate in place is that allowing the tax breaks to expire would impact jobs. I see no jobs being created by allowing the Hendersons (corporate law professor and doctor) to get this favorable treatment while the country is mired in the debt those breaks helped considerably to create.
Allowing those tax breaks to expire will effect few Americans, but will benefit all. The upper 1%-2% of income earners includes hedge fund operators, corporate CEO’s, many in the entertainment industry celebrities, film writers/directors/producers and a lot of lawyers, etc. I don’t see many, if any, additional job creation coming from those sources as a result of tax breaks either.
So, how about small businesses? Well, statistics indicate 97% of small businesses do not make $250K pre-tax dollars. And those that do, assuming a modest 4% pre-tax return on sales, would have sales revenues of over $6 million. That’s after all expenses, salaries, officers’ bonuses, travel, car payments for owners, etc. At the same pre-tax rate, growing the profit to $350K and thus costing that small business owner a paltry extra $3000 of taxes, would require a sales revenue increase of $2.5 million. Besides, the government has provided a %5000 tax CREDIT for each person hired and same-year depreciation of any capital expenditures for 2011.
No sympathy.
What EVERYONE forgets is that the tax is on $250,000+ of the ADJUSTED GROSS INCOME, the amount you make AFTER the basic set of deductions (children, etc.). In fact, the tax is calculated AFTER deductions. Thus, most people who make $250,000 and has a mortgage, kids, give to charity, etc, will NOT be in the higher tax bracket.
I cannot find the report, but one of those think tanks said that the $250,000+ tax increase will actually kick in when the average person makes more than about $320,000.
The problem with the political debate in this country are the reactionaries on both sides that do not think beyond the words. Stop reading the words and think about their meaning and stop abrogating your brain to these pundits. Reconnect the brain to your mouth and your brain to your fingers before commenting. Maybe we would have a better political discourse!
I have no idea how long this gentleman maintained his blog but if it was more than a couple of months then he must have been aware of the length to which certain bloggers will go.
Although an income exceeding $250,000 but less than $500,000 is certainly not an indication of wealth, it does imply an upscale lifestyle which would include objects worth stealing … foolish to advertise it on the web.
According to the US Census Bureau, in 2005 the median household income was roughly $46,000. At the suspected $400,000 income, this man’s family is making almost 10 times the amount of the average American family … he wants tax cuts … what he needs is common sense.
Blouise, good comment.
What he actually wrote was: “Our combined income exceeds the $250,000 threshold for the super rich (but not by that much)….”
Source: http://delong.typepad.com/sdj/2010/09/todd-henderson-we-are-the-super-rich.html
“Sources: Fox”
Better source: Google’s cache
Read his whining, and then the Fox noise machine story again. My sympathy for this fool dropped through the floor. And if it’s even possible anymore, so did any respect for Fox.
I suspect most of you have not read his post, only the Fox story about it. He threatens the Mexican guy who cuts his lawn, the Polish woman who cleans his house, the art school he sends his kid to, and his cellphone company. He thinks he is a patriot for owning stock. He complains of his taxes funding public education when he sends his three kids to private schools. “What is the theory under which collecting this money in taxes and deciding in Washington how to spend it is superior to our decisions?” he asks. Uh-huh. “Ask the entrepreneurs we employ and the new arrivals they employ in turn whether they prefer to work for us or get a government handout.” (This is under the theory held by the affluent that people dislike government handouts for being shameful rather than inadequate, so that dollar for dollar they aren’t as appealing as having worked for the money.)
The comments underneath weren’t “vicious” and “all too common for blogs”. (It figures he calls them “blogocane”.) I can only hope his wife strangles him for this.
Give this guy a gun to wear on his hip and a hat with tea bag fringe for his head … as for his ability to make “superior” decisions, there is a word for such an exaggerated sense of one’s own worth or importance and it ain’t patriot.
Two Hundred Fifty Thousand Dollars In Student Loans???
I’m with Bill Maher on this one:
http://www.huffingtonpost.com/bill-maher/new-rule-rich-people-who-_b_737429.html
geazer, it may be even worse: “My wife has school loans of nearly $250,000 and I do too, although becoming a lawyer is significantly cheaper.”
I don’t know much about student loans but isn’t the interest deductible?
The overall thing I don’t get is his mockery of the idea that he might be a “millionaire” simply for earning a paltry $300K to $400K a year. Yes you might be, if you earn that much and save your money with the ruthless thrift I see being prescribed for the less fortunate by this guy’s allies. I earn almost as much as he does and I could be a half-millionaire if I tried (since I support a disabled spouse). But I don’t write stupid posts whining about how it’s so unreasonable that my main expense is supporting an army and traffic lights.
The other thing about Henderson is that he is a Professor at the University of Chicago. I would submit that this institution has done more to harm this country in the last half century than any other, save for the Harvard MBA Program.
Professor Turley said “I hope that Henderson will reconsider and restart his blog — and that people will show a level of civil restraint in participating in this and other debates.”
Take heart, everyone. He never dropped his blog, only the posting about his finances. He is cheerfully blogging along at http://truthonthemarket.com/
Blouise, I am not sure, but I think that loans must be secured by residences to be deductible. A homeowner with a lot of equity could refinance, or take out a home equity line of credit (HELOC), to pay off student debt. It may not really matter, however, since at his level of income, deductions are capped, and there is an alternate minimum tax (AMT)to be considered. He would probably exceed the cap just by adding up state income taxes, local property taxes, and home mortgage interest. So he is unlikely to benefit from any deductible student loan interest. He said he is doing his own taxes on Turbotax. Maybe he should befriend some of the tax law profs on the stellar UCLaw faculty for a little professional courtesy legal advice. Anyone else can jump in to set me straight if I have erred.
The internet is the natural home of incantation; discussions on email lists and online forums, bereft of the subtleties of normal human communication, often turn into a duel of incantations that the loudest and most intransigent voice generally wins.
i don’t know who wrote this but it reminds me not to write anything online that i wouldn’t say to someone face to face
Blouise,
The real problem with the student loans is the principal amount not the interest. They are usually low interest programs, but when you have over $100,000 in law school loans and no job yet, it becomes very worrisome. That being said, I agree with you 100% that this guy is living in a dream world. 95% of the country would easily take his place with that salary. He has had a huge tax beak since the Reagan years and especially since the Bush tax give aways. He, and his comrades in dollars are due to pay their fair share.
What Maverattick said:
Better source: Google’s cache
Before pulling them off his group blog, Henderson made some further posts (one entitled “Now I Know I’m Right”) which displayed a naive almost Randian outlook. Many took reasonable issue with specific issues that he raised in those posts but the Henderson demonstrated an inability to engage.
Not surprising that he and his fellow extremists on the blog hid behind the inevitable vilification to dodge the awkward unvilifying questions. Not surprising either that Fox is sympathetic.
It appeared to be an article of unshakeable faith for Henderson that renewed tax cuts for the relatively wealthy are good for the economy. Even when Krugman begged to learnedly differ, the Prof interpreted that as vilification.
I too hope he returns to blogging. There remains a dialogue to be had. For example, Henderson made much of the fact that he had earned his wealth, not inherited it. I’d therefore like to know whether he favours estate taxes. I fear he opposes them, but he is free to correct me on that.
Maverratick, thanks for the link. What I got out of the article wasn’t so much whining (and there was that) but anger. Here and there it broke through “Homes near our work in Chicago aren’t cheap and we do not have friends who were willing to help us finance the deal.” (snap!) He sounds like he’s pissed because he did what he thought he was supposed to do, followed the format for still youthful up-and-comers, and is now in trouble financially. I can actually understand that even if he and his wife are fools for buying into a template that was a trap from square one.
The people on this blawg are, many of them, old enough to remember when credit was literally nonexistent except for a house and car, and those of us raised in such times in other than the wealth class made decisions that hinge on money with quite a different mind-set and strategy. This guy feels screwed and it shows.
Everybody here might have suggestions about what he should have done, shoulda’ coulda’ woulda’, because he made some bad financial decisions. Thing is, I don’t see them as being extraordinary for who he seems to be and thinks of himself as. He got taken. You just can’t believe all that stuff people that make money off you want you to believe. If the Jones’ do and you want to fit in you’re doubly cursed. Considering he and his wife’s occupations I can see that there would be some pressure there to fit in.
Where I do have serious concern for him and others is the college debt- that’s appalling and I read recently that some astronomical percent of today’s college grads leave college with years and years worth of debt. People smart enough to actually go to college and have hopes of making something of themselves are yolked to a millstone that should limit their life choices but, like the Henderson’s, probably do not in ways that help to free them. They’re programmed not to. I reflect on his story with more sadness than shadenfreude or derision.
Having said that though, I’d still want the tax cuts to expire. And The U.S. to adopt the model of education that allows the first 16 years of education to be state paid.
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I read this fascist’s Randian blog before he, in an act of supreme cowardice, took it down. I’d say this to his face, so anonymity is not the cause for this “uncivil” speech:
“Fuck you, you spoiled brat. You’re a living example of every single thing that is wrong with this country.”
I’d say lots more to him than that, actually, but won’t sully your blog with it, Professor Turley.
Brad Delong not being uncouth.
I agree that people commenting on blogs or online news article should keep a civil tongue.
That said, I think people like Porfessor Henderson don’t understand how bad it has gotten for millions of middle and working class Americans. Does he have a clue how many Americans have been out of work for well over a year and have exhausted their unemployment benefits? Has he thought about all the people who have lost their homes? Does he care? He’s feeling sorry for himself? Maybe he should open his eyes, step out into the “real world,” and find out what’s going on. He should stop whining and get a grip. He’ll get NO sympathy from me!
*****
From the Chicago Tribune
Earnings of more than $250,000 a year, but professor laments family just getting by
Professor’s lament about possible tax hike draws firestorm of criticism
September 23, 2010|By Ameet Sachdev, Tribune reporter
http://articles.chicagotribune.com/2010-09-23/business/ct-biz-0924-rich-blog-20100923_1_law-professor-blog-taxes
Todd Henderson feels like he’s barely making ends meet. He’s a law professor at the University of Chicago. His wife’s a doctor at the school’s hospital. Their combined income exceeds $250,000. They have a nice house, a nanny, kids in private school, a retirement account and a lawn guy.
Wait. What’s he talking about? A lot of people would consider him rich.
People have had some other choice words for the outspoken professor, who has been on the receiving end of a jolt of criticism in response to a blog posting last week in which he described his lifestyle in detail and then complained about President Barack Obama’s plan to raise taxes on high-income families.
**********
From The Wall Street Journal
SEPTEMBER 24, 2010, 9:53 A.M. ET
Advice for the ‘Poor Rich’
http://online.wsj.com/article/SB10001424052748704129204575506051919012596.html
Excerpt:
Everybody hates Todd Henderson.
In case you haven’t heard, he’s the University of Chicago law professor who unwisely blogged last week about his financial woes in a post headlined “We Are the Super Rich.”
Mr. Henderson and his wife, an oncologist, make more than $250,000 a year, and apparently they’re struggling to get by. If President Barack Obama gets his wicked way, and tax rates rise for those earning more than $250,000 a year, Mr. Henderson says it will mean real sacrifice in his family.
It’s too easy to pelt Mr. Henderson with rotten eggs, as so many have now done. (He yanked the post, but way too late–and on the Internet, one’s blunders never die.) But can we, instead, give him some useful advice?
Sure.
Adjust your expectations. “I can show you a client of mine right now who lives in a suburb of Chicago, he’s a doctor, makes $350,000 a year, and he routinely racks up $25,000 on his credit cards,” says Michael Kalscheur, a financial planner at Castle Wealth Advisors in Indianapolis. The reason? Too many people have “unrealistic expectations,” says Mr. Kalscheur. They figure they should be vacationing in Italy, driving expensive cars, the whole deal. “We need to knock him upside the head. He’s got to stop spending money.” Every financial planner will tell you the same thing: The real challenge is tackling the psychology.
Stop blaming the government. According to the Congressional Budget Office, $265,000 is the average income of a household in the top 20% of the country, and $395,000 is the average for those in the top 10%. (The thresholds, of course, will be much lower). So you’re near the top of the tree in the richest country in history. At the same time, contrary to what you seem to think, federal taxes are not extortionate by modern historical standards. According to the CBO, families in the top 20% pay average federal taxes of 25.1%. The figure in President Reagan’s final year in office: 25.6%.
Maybe if the professor downgraded his house and mowed his own lawn and didn’t eat out he and his wife would be able to tackle their student loans at a more aggressive pace. I make about $30-35K and have $50K in student loans and I pay extra so that I will pay off my loans in 5-6 years instead of the full term. I’m sure his payments are high but so is his income, there’s no reason he should still owe money after how many years out of school? Maybe he needs to get on the Dave Ramsey plan…
I have to correct a posting at September 30, 2010 at 3:56 pm. Henderson has stopped blogging at a site that continues to post other articles by other contributors.
Are you kidding me. I could pay off the loan the first year, or less, and have tons left over. But then I earn less than 30K, so I know how to live on less than 30K.
I worked up to three jobs at a time when I was in school. So I didn’t owe anybody anything when I graduated from college.
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Fuck you spoiled brat…….